ALL Surges on Speculation Cosan Talks to Resume: Sao Paulo Mover

By Julia Leite -
Jan 9, 2014

ALL - America Latina Logistica SA,
Brazil’s largest railroad operator, rallied the most since
August after newspaper Valor Economico said the company may
restart merger talks with Cosan (CSAN3) SA Industria & Comercio.

ALL surged 8 percent to 6.75 reais at 12:12 p.m. in Sao
Paulo. It was the best performer of the benchmark Ibovespa,
which fell 0.9 percent. Cosan, a producer of sugar and ethanol,
gained 2.2 percent to 37.71 reais.

Cosan Chairman Rubens Ometto and ALL shareholders may
resume talks on a merger that could help resolve a dispute over
sugar transportation contracts, Valor reported today, without
saying how it got the information. Sao Paulo-based Cosan
abandoned plans to pay 896.5 million reais ($374.5 million) for
a 5.67 percent stake in ALL in August, saying negotiations
“ended without the transaction coming to fruition.”

While Cosan’s Rumo Logistica SA unit said it delivered on a
pledge to invest about 1 billion reais to increase rail capacity
in the partnership to carry sugar to Brazil’s Santos Port, it
argues that ALL didn’t give its cargo priority as agreed. ALL is
suing to terminate the contract, saying Cosan hasn’t completed a
terminal upgrade needed to avoid logjams upon the sugar’s
arrival by train.

Curitiba, Brazil-based ALL said in a regulatory filing
today that while it “constantly evaluates alternative
solutions” to the dispute with Rumo, it’s not able to predict
their result.

Cosan’s press office didn’t immediately reply to a request
for comment when contacted by Bloomberg News.